The Competition Commission has extended by three months the deadline for its investigations into the grocery market, following the publication of its Emerging Thinking preliminary report into the activities of the big multiples earlier this year.
In a letter to the main parties, the Competition Commission has notified that its report into competition problems in the grocery market, which was originally scheduled for November 2007, is now expected to be published in February 2008.
This also means that the deadline for its provisional findings scheduled for June 2007, is expected in September of this year.
The Commission said that it will continue with further analysis of the evidence including: any possible waterbed effect; the prices charged by grocery suppliers to grocery retailers and wholesalers; an assessment of barriers to entry into grocery retailing; and the impact of below- cost selling and other pricing strategies.
James Lowman, chief executive of the Association of Convenience Stores, called for a measured approach given the scope of the enquiry, saying: “This inquiry is a once in a generation opportunity to achieve fairness in the grocery market and is too important to rush the conclusions. We had warned the Commission that the original timetable caused unnecessary pressure on the process. The ACS has called for the Commission to prioritise thoroughness over speed and we are pleased that they have heeded our call.”
The Commission has also given further detail on how they are going about measuring competition in local markets, including plans to undertake ‘Small but Significant and Non-transitory Increase in Price’ (SSNIP) analyses to assess competition.
An SSNIP test seeks to identify the smallest market within which a hypothetical monopolist or cartel could impose a small but significant increase in price and defines this as the relevant market.
The ACS said however that it is unconvinced by the CC’s methods. “Our concern is that any analysis is only as good as the data upon which it is based,” noted Lowman. “Collecting that data in the right way is the main challenge that the Commission faces at this stage.”
